Page 270 - ISC PROCEEDINGS 21.4

ENHANCING FIRM PERFORMANCE THROUGH BUSINESS MODEL
INNOVATION IN THE DIGITAL AGE

Nguyen Xuan Hung* , Nguyen Thi Thu Huong , Nguyen Duc Nhat Anh 3
1
2
1, 3 National Economics University, Hanoi, Vietnam.
2 Hanoi Open University, Hanoi, Vietnam.
(*E-mail: hungnx@neu.edu.vn)

ABSTRACT
In the context of accelerating digital transformation and deepening international
integration, Vietnam’s private sector faces an urgent imperative to innovate business
models in order to enhance operational efficiency and strengthen competitive capacity.
This paper synthesizes the theoretical foundations of business model innovation and
examines several representative models, with empirical illustrations drawn from the
VIE50 enterprise group. The findings indicate that business model innovation exerts a
direct and significant impact on firms’ operational performance, contributing to revenue
growth, profitability, and market expansion. However, enterprises continue to encounter
substantial barriers, including limited access to capital, shortages of digital-skilled human
resources, regulatory constraints, and intensifying international competition. Based on
the analysis, the study proposes five major policy and strategic solution groups: (1)
expanding access to finance and R&D incentives; (2) developing digital human capital and
innovation governance capabilities; (3) improving regulatory frameworks and
implementing sandbox mechanisms; (4) supporting international integration through
FTAs and brand development; and (5) fostering a public–private innovation ecosystem.
Keywords: Business model innovation, competitive advantage, firm performance,
innovation, new era.

1. Introduction
In the context of globalization and the digital era, business model innovation has
emerged as a critical driver of enhanced operational performance and competitive
capability. Beyond incremental improvements in products or processes, business model
innovation represents a fundamental transformation in how firms create, deliver, and
capture value. The rapid advancement of digital technologies, big data, and artificial
intelligence has accelerated the development of platform-based business models,
enabling enterprises to expand market reach, optimize operations, and more effectively
leverage available resources. In Vietnam, the private sector has increasingly affirmed its
pivotal role in socio-economic growth and development. Resolution No. 10-NQ/TW (June
3, 2017) of the Central Committee formally recognized private economic development as
a key driving force of the socialist-oriented market economy, marking a significant
milestone in strengthening the sector’s institutional position. Subsequently, Resolution
No. 57-NQ/TW (December 22, 2024) on breakthroughs in science, technology, and
innovation development, and Resolution No. 68-NQ/TW (May 4, 2025) on private sector
development, further emphasized the need to refine regulatory frameworks, promote
innovation, and create enabling conditions for the sustainable and efficient growth of
private enterprises in the new development phase.

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